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A company is considering the purchase of a machine which costs $62000, has an expected life of four years and has a scrap value of
A company is considering the purchase of a machine which costs $62000, has an expected life of four years and has a scrap value of $15000. The machine is expected to increase revenue by $16000 each year and requires a maintenance cost of $2000 per year. Assuming a tax rate of 38%, compute the net present value for this investment using the double declining balance method for two years followed by the straight-line method.
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